The Child Tax Credit (CTC) has grown into an important way for families all over the US to get money. The 2024 CTC was the biggest of the year because it gave out a record amount of money to families who qualified.
People who are eligible and have children under 17 living with them can get this non-refundable credit to help them deal with their money problems.
The child tax credit for 2024 is based on your income, how you file your taxes, the number of children you have, and whether the IRS considers your kid to be a qualifying child.
CTC has been providing relief to up to 40 million families
There are up to 40 million people who can get tax breaks through the CTC. Under the Tax Cuts and Jobs Act (TCJA), the CTC has been giving up to $2,000 a year to families who qualified since 2017.
Families with dependents over 17 and full-time students between the ages of 19 and 24 may also be able to get a credit of up to $500 for each dependent. This credit is not refundable.
For the year 2024, families got a refunded CTC amount of $1,700. In addition to the children having to be a certain age, the credit is based on certain income rules.
Families may also be able to get the extra child tax credit, which gives them a partial tax refund instead of the full amount. Families with a lot of money can also get CTC, but they get a smaller refund.
Some families may receive as much as $2,000
The most a family can get in CTC is $2,000. To get the full amount, your modified adjusted gross income must be $400 or less if you are married and filing jointly or $200 or less if you are not married and filing jointly.
If your income is higher than these amounts, $50 is taken away for every $1,000 that you make more than the cap. The extra tax refund for children is set at $1,700, though.
If you are a head of household and make close to $200,000 a year, you can no longer get the child tax credit. In the same way, the credit starts to disappear for households with a total income of $400,000 for married couples filing jointly.
This is because the tax credit is meant to help families who are having a hard time paying for their children’s needs.
Important to keep in mind is that the full $2,000 is not completely tax-free. You will not get the full $2,000 back as a tax return, even if you do not usually file for income tax. The most that can be returned is $1,700.
For the 2023 tax year, you could get back only $1,600. It is important to note that even if you qualified, you might not get the full $1,700 because of your income. After your tax bill is paid off, you may get up to $1,700 that is not taxed.
Families and dependents must meet qualifying criteria to be eligible for the refunds
For the return, children must be younger than 17 years old. The child must be the taxpayer’s actual child, step-child, sibling, foster child, or descendant. The people who depend on others can not give more than half of the annual help.
People who depend on the taxpayer must live with them for at least six months. They can not file a joint return with their partner unless they want to get back taxes that were withheld or taxes that were paid in advance.
Dependents must be U.S. citizens, U.S. nationals, or aliens who lived in the U.S. during the tax year. You need to list the child as a dependent on your tax return.
The CTC helps families with their short-term cash needs and also helps them in the long run.
Families can use the credit to save for things like college fees or emergency funds, which helps them stay financially stable. This credit might also help lower the number of poor children.
